The September 11th Victims' Compensation Fund: Fund Approaches to Resolving Mass Tort Litigation
33 Pages Posted: 26 Jan 2013
Date Written: January 1, 2002
The legal landscape surrounding the World Trade Center events merits attention because through the Victim Compensation Fund the United States government quickly offered victims an alternative means for remediation. This approach, rather than through the tort litigation system, is known as a fund approach.
The terrorist attacks on September 11, 2001 constitute the largest and most catastrophic mass tort in history. With the exception of the Japanese attack on Pearl Harbor, the World Trade Center events are unique in the American experience and fit uncomfortably within models of mass tort litigation. However, despite arguments to the contrary, the terrorist attacks do embody certain characteristics of mass torts.
Leo Boyle, President of the Association of Trial Lawyers of America, has been quoted as saying, “[w]hat happened on September 11th was a mass murder, not a mass tort.” Despite this rhetorical hyperbole, the events of September 11, 2001 embody characteristics typical of both mass accidents as well as true dispersed mass tort litigation.
Commentators distinguish between “mass-accident” cases and “mass tort” litigation. “Most so-called mass-accident or mass-disaster cases involve situations in which a number of persons are simultaneously harmed by a single act of the defendant.” Typical examples of mass-accident cases are airplane crashes, explosions, catastrophic fires, and oils spills. Dispersed mass tort litigation, in contrast, is “characterized by multiple occurrences of various related harms over time.” The events that occurred on September 11, 2001 encompass certain characteristics typical of mass accident cases, such as a single site, single event disaster; a large number of claimants; little geographical dispersion of claimants; and combined claims for personal injury, wrongful death, and property damage. However, the events of September 11, 2001 also reflect classic mass tort litigation. Thus, the events at the World Trade Center are also characterized by “numerous victims seeking damages from the same defendants; claims arising from similar events or series of events; high costs attending individual litigation; and injuries being widely dispersed over space, time, and jurisdictions.” Other characteristics of mass tort litigation include an indeterminate class of claimants, the possibility of future claimants, and indeterminate defendants. Mass torts “vary from single disasters with many victims, to prolonged exposure to or use of hazardous products or materials.”
There can be little doubt that the events of September 11, 2001 constituted a mass disaster. Whether those events are viewed as a mass accident or true dispersed mass tort has implications only if claims arising from these events are pursued through litigation. The different analytical models would have consequences in the litigation arena.
Although there has been increasing public dissatisfaction with the Victim Compensation Fund with each passing month, the Fund approach is not itself novel. Indeed, as will be explained, the Fund incorporates many characteristics of other fund approaches enacted by Congress in the past.
Two points are signally important. First, fund solutions are not new. There are many examples of fund approaches to mass tort litigation. Second, although the fund approaches share common characteristics, each is unique based on its facts, features, and implementation.
The Victim Compensation Fund will continue to be the source of enduring controversy. Arguments surrounding the Fund, however, deserve some contextual perspective. The Fund is not as novel an approach as its critics would suggest. The Victim Compensation Fund is one of several governmentally enacted fund solutions that Congress has enacted in the past four decades.
The Victim Compensation Fund shares many common attributes with these other funds. It was enacted to help preserve an industry deemed vital to national interests and the national economy. It provides for an election of remedies to the exclusion of other remedies. It offers fixed compensation values based on established demographic charts, grids, or statistics. It limits defenses and defendants' liability. Initially, it capped awards. It limits exemplary damages. It involves a claims processing mechanism with provisions for hearings and reviews.
All these characteristics are common to other fund approaches that Congress has enacted in the past. Rather then being novel, the Victim Compensation Fund has many overlapping or common features with these funds.
Will the Victim Compensation Fund be a model for future mass tort resolution? Each of these funds share common characteristics, but each is unique in its own features. This is also true for the Victim Compensation Fund. It is sui generis, created to respond to specific events. But as a generic fund-approach, it aligns with these other fund solutions to provide a possible model for resolving mass disaster claims.
Keywords: World Trade Center Victim Compensation Fund, fund approaches, mass tort litigation, Ken Feinberg, insurance
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